White House climate envoy John Kerry is planning to develop a system where developing nations can earn “carbon credits” by cutting fossil fuel emissions, according to The Financial Times.

The plan would reward countries with carbon credits if they reduce CO2 emissions from their power sector and in turn, large corporations would be able to buy the credits to offset their own carbon emissions, the FT reported, citing sources familiar with the plan. Kerry and the Biden administration believe the plan could help fund green energy projects and are set to unveil it at the United Nations COP27 Climate Change Conference in Egypt.

Kerry is attempting to get other nations, businesses and climate experts to incentivize developing nations not to produce fossil fuels, according to the FT. Participation in the framework would be voluntary for both companies and countries but Kerry believes that the plan is attractive to corporations as it offers them the opportunity to counteract their emissions.

The carbon credits would be certified by an independent accreditation body; however, the rest of the plan’s details have yet to be developed, according to the FT. Climate negotiations at COP27 will be primarily focused on coming up with a financial solution to help poorer countries fight the “damage and loss” caused by climate change.

Firms have already been put under pressure to reduce their climate impact due to the rise of environmental, social and corporate governance (ESG) investing principles that have caused large asset managers to avoid investing in fossil fuel companies. The SEC also proposed a rule in March that would also require businesses to disclose information about “climate-related risks” in their financial statements.

The UN believes that wealthy countries are not moving quickly enough to meet global climate targets. The majority of developed countries and many private corporations have made the commitment to achieve net-zero emissions by 2050, with some setting a goal of halving emissions by 2030.

A State Department spokeswoman did not immediately respond to the Daily Caller News Foundation’s request for comment.

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